In this issue:
Tax Time Scams to Avoid
Millennials Increasingly Link Money With Fulfillment
Top 10 New Year's Resolutions for Your Budget
|Tax Time Scams to Avoid
Taxes seem to strike fear in the hearts of millions. And for some reason, that makes a few people lose their heads and hand out their personal information to strangers claiming to be from the IRS.
Listed below are the top six income-tax scams to steer clear during the income tax season.
Scam No. 1: "It's the IRS calling"
Fradulent IRS agents will aggressively call and inform you that the police have a warrant for your arrest. And unless you go to Walgreens, buy a prepaid debit card loaded with hundreds of dollars and call back with the number, you will be arrested.
This scam is often targeted to the elderly or other people who may be susceptible know that if they get a call from the IRS, it’s fake.
But if you want to hear what one of these calls sounds like, you can take a listen at The Washington Post. If you’re really concerned you might owe money, you can call the IRS directly at 1-800-829-1040.
Scam No. 2: No, wait, it's the IRS emailing
Let's be very clear. The IRS do not email. Ever.
Or at least, they don't email you, the consumer. They won't be sending you an email saying you need to click a link and verify your identity to get a refund. Likewise, you won’t go to jail if you don't click on their link and fill in your personal information.
It's all a ruse to get you to give up information to the bad guys so they can steal from you, as you'll see in scam No. 3.
Scam No. 3: Early filers stealing your identity
People use scam No. 2 to pull off scam No. 3, among other things.
They use your name, address, Social Security number and all that other personal data you provided to fill out a fake tax return in your name. Then, they get a big refund, and your return gets rejected because the IRS thinks you already filed.
The problem can be fixed, but it’s a giant headache. Your best bet is to guard your Social Security number closely and file your return as soon as you have all of your paperwork.
Scam No. 4: Promise of a monster tax refund
You do not want to have your taxes done by someone advertising on a telephone pole. They may say they are going to get you the biggest refund ever, but there’s a chance they are going to falsify your information to do so.
That faked return may get you a refund, but maybe that’s only after your preparer skims some off the top. It could also mean you lose certain Social Security and low-income housing benefits because the income listed on your tax return no longer meets eligibility criteria.
Plus, if you get audited, the false information is your problem because the IRS holds taxpayers legally responsible for the information provided on their returns.
Scam No. 5: Fair-weather tax preparer
This scam is a variation of scam No. 4. These people don’t necessarily claim to give you the biggest refund. They simply claim to do your taxes at a reasonable rate.
The problem? They’re really crooks.
These so-called tax preparers may take your money and run. Or they may file a return for you but then help themselves to your Social Security number and other information to be used later for devious deeds such as identity theft and retail fraud.
You can protect yourself by carefully vetting any tax preparer. Search for reviews online, ask for referrals and read our article on how to pick the best tax pro.
Scam No. 6: The charity that isn't a charity
Fraudulent charities can be a problem anytime of the year, but they can come back to bite you at tax time. If you are audited and you deducted donations from a charity that really isn’t a charity, you could get hit with more taxes and a penalty.
Typically, fake charities make look-alike logos and websites that trick you into thinking you’re donating to established organizations. They may also spring up after a disaster and take advantage of the fact that you want to help. In reality, little to none of your money will make it to the stated cause.
In addition, if a charity says it needs your Social Security number to take your donation, hang up the phone. No charity needs that information, and it’s likely a ploy to steal your identity.
Article courtesy of MoneyTalksNews.com
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|Millennials Increasingly Link Money With Fulfillment
Focused on purpose and meaning, millennials nonetheless wind up more satisfied when their finances are in order, a new study suggests.
Millennials define success more broadly than older generations, seeing it as less about wealth and more about a healthy and fulfilling life. But even as this generation tries to change the world through jobs and investments with purpose, among other things, it may be finding that financial success and personal satisfaction often go hand in hand.
Millennials who describe themselves as successful - whatever that may mean to them as individuals - report more healthy finances across the board than those who do not, new research shows. For example, 31% of millennials who say they are satisfied with their current lifestyle report annual income over $75,000, while just 24% of all millennials earn that much.
Might their healthier income be part of the reason? That seems likely, based on a broad range of findings in a new survey from MoneyTips.com, an online personal finance community geared at 18-to-34 year olds. Young adults describing themselves as satisfied with their current lifestyle, or successful, not only had more income but less debt, more savings, and more confidence in their ability to retire comfortably.
None of this would feel surprising if not for the widely espoused view that millennials favor quality of life issues including job flexibility, social impact, and personal experiences over career and earning power. Maybe they are growing up and realizing that money may help - or at least not hinder - such pursuits. Or maybe their worldview is evolving at a subconscious level as the real world bears down on them.
Either way, a generation that grew up with participation trophies and helicopter parents - and unbridled optimism - seems to be waking to the connection between a satisfying life and healthy finances. Nothing in this survey suggests millennials have lost their zeal for meaning. But financial security has a creeping sense of place.
Asked what financial concerns keep them up at night, 46% of millennials who call themselves successful cite being able to earn enough to secure their future. That compares with 55.6% of all millennials. Likewise, just 23.7% of self-described successful millennials worry about their ability to pay day-to-day expenses, and 33.6% worry about their ability to live within their means. That compares with 41.2% and 42.2%, respectively, for all millennials. A higher percentage who feel satisfied also say they are on track to meet their financial goals, have calculated how much they will need in retirement, and stick to a monthly budget.
About 40% of self-described successful millennials owe at least $15,000 while 45% of all millennials owe that much. When it comes to money in the bank, 58% of successful millennials have at least $10,000, while just 46% of all millennials have that much. Certainly, savings and income aren’t everything. But this next generation has come a long way from thinking finances matter little at all.
Article Courtesy of Time.com
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|New Year's Resolutions for Your Budget
It is still early in the year and it is not too late to spruce up those New Year’s resolutions especially those concerning finances. Having a budget for your personal or household expenses is a great place to start, but New Year's resolutions are about improving on the good habits you've already established.
Learn how much you really spend: Successful diet programs tell participants to write down every bite or sip that passes their lips to find out how much they actually eat on an everyday basis. When people see how little snacks add up and when they chow down without thinking about it, it’s easier to target those trouble spots. The same principle works for your money. For one week, keep tabs on every penny you spend - cash, check, debit or credit card. If you spend it, jot it down. Having a record of your spending will help you pinpoint your impulse purchases.
Start an emergency fund: It is suggested by some that one should have three to six months’ worth of living expenses in a savings account you can tap into if you lose your job, have a medical crisis or the like. That’s really good advice. But for many of us, that can seem like such a huge amount that we’re discouraged from even starting to save. Put the six-month goal out of your mind for now. Figure out how much you can spare from your budget to sock away every month. It doesn’t have to be a lot of money, but it does have to be done regularly.
Own your splurges: We all have our weaknesses: fancy coffee drinks, tabloid magazines and takeout dinners. No, we’re not going to tell you to cut them out. But if you leave them out of your budget, you’re not going to stop buying those things; you’re just going to blow your budget. So be honest with yourself about the discretionary stuff you splurge on and include it along with your more sensible expenses.
Set at least one long-term goal: By the end of 2015, what do you want to have accomplished? Maybe you want to be debt-free or to save $5,000 towards your child’s college education. How about setting a goal to make two extra mortgage payments over the course of the year? If all of this sounds hopelessly out of reach, set a goal that reflects where you are right now. Maybe you want to qualify for a credit card or not incur any overdraft charges.
Pack a lunch one day a week: It is suggested that bringing your lunch can save you bundles of money if, but let’s be honest: That’s a lot of work if you’re not used to it. You have to build a decent chunk of shopping and preparation time into your schedule. The result is that many of us get intimidated and don’t even bother with this advice. Instead of skipping it this year, start small. Bring a lunch from home on Mondays, maybe leftovers from a weekend meal. Or stock up on microwavable dinners when your supermarket runs a special and throw one of them into an insulated bag for the commute. If the savings motivates you to brown-bag it more frequently, that’s an added bonus.
Prepare for "surprise" expenses: A lot of people dig themselves into a hole with credit card debt when they have to pay for an expense for which they didn’t plan or save. Of course, some things really are emergencies - say your car gets rear-ended, or your dog eats something he can’t digest. But many of the big bills that catch us unaware are events we should have seen coming. Start socking away money for back-to-school clothes, snow tires and other infrequent-but-predictable expenses.
Score cheaper splurges: The jury’s still out on whether the explosion of daily deal sites is good or bad for merchants, but it’s definitely a boon for consumers. If you live in or near a major city, sites like Groupon, Living Social and BloomSpot deliver deals for cut-rate haircuts, dinners and fitness classes. If you’re willing to try something new (and read the fine print), these sites can sometimes reward you with significant savings.
Teach your kids how to budget: Kids are bombarded with marketing messages practically from birth, and countless influences send them the message that they need to spend to be satisfied. Unfortunately, there’s really no counterpoint to that; there isn’t a class in school where kids learn to distinguish what they need from what they want and how to pay for what they do buy. They need to hear it from you. Let your children see and be a part of your budgeting process so they learn how it works. Introduce them to the ideas of bank accounts and credit cards at age-appropriate intervals. Teach them about savings and debt, maybe by giving them an allowance so they can learn to manage money - and make mistakes - on a small scale, so they don’t wind up getting into big money trouble once they get out on their own.
Use comparison-shopping apps: Not everybody is on the iPhone/Android/Blackberry bandwagon, but people who are can benefit from some new high-tech tools that help you save. Several mobile apps put the kind of comparison shopping you used to need a desktop computer, or a trip around town to different stores, to accomplish. If you have a smartphone, you’re already paying for data use, so put the device’s instant connectivity to work for you. Some apps, for instance, let you scan barcodes and will tell you if the item on the shelf in front of you is cheaper on the other side of the mall or from an online retailer.
Go generic on one name-brand item: Again, start small. Pick just one thing: Breakfast cereal? Shampoo? Bathroom cleanser? It’s up to you. But give one a try. Save the receipt so you can return the generic if you notice a big difference in taste, performance or other dealbreakers. But maybe you’ll discover the the only thing you’re missing is the brand name - and the higher price tag.
Article courtesy of Time Magazine
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